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Taizhou Environmental Protection Federation Vs. Taixing

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Taizhou Environmental Protection Federation Vs. Taixing Supreme People’s Court of the People’s Republic of China Civil Ruling (2015) Min Shen Zi No.1366 Retrial applicant (Defendant in first instance, appellant in second instance): Taixing Jinhui Chemical Company. Domicile: No. 10 Xingang Road, Economic Development Zone, Taixing, Jiangsu Province Legal Representative: XU Jiangbo, Chairman of the Board of the company Attorney: ZHAO Bing, lawyer, Jurisino Law Group Respondent (Plaintiff in first instance, appellee in second instance): Taizhou Environmental Protection Federation. Domicile: No. 18 Yonghui Road, Taizhou, Jiangsu Province. Legal Representative: TONG Ning, Secretary General of the Federation Attorney: CHEN Xiaojun, lawyer, Jiangsu Jianghao Law Attorney: ZHANG Wencan, lawyer, Jiangsu Tianzi Law Firm Defendant in first instance, appellant in second instance: Jiangsu Changlong Agrochemical Co., Ltd. Domicile: No. 8 Tuanjiehe Road, Economic Development Zone, Taixing, Jiangsu Province. Legal representative: WANG Weihua, General Manager of the company Defendant in first instance, appellant in second instance: Jiangsu Shimeikang Pharmaceutical Company. Domicile: No. 10-2, Xingang Nanlu, Economic Development Zone, Taixing, Jiangsu Province Legal representative: WANG Junhua, Chairman of the Board of the company Attorney: Zhang Yabin, lawyer, Jaingsu Hengqiao Law Firm Defendant in first instance, appellant in second instance: Taixing Shenlong Chemical Co., Ltd. Domicile: No. 3, Shugang Road, Economic Development Zone, Taixing, Jiangsu Province Legal representative: JIANG Desheng, Vice General Manager of the company Defendant in first instance: Taixing Fu’an Chemical Co., Ltd. Domicile: No. 8, Zhonggang Road, Economic Development Zone, Taixing, Jiangsu Province Legal representative: QIN Taohan, Chairman of the Board of the company Attorney: YU Xinsheng, lawyer, Jiangsu Youfang Law Firm Defendant in first instance: Taixing Zhenqing Chemical Co., Ltd. Domicile: No. 10, Shugang Road, Economic Development Zone, Taixing, Jiangsu Province Legal representative: YANG Jiqun, manager of the company Retrial applicant Taixing Jinhui Chemical Company (hereinafter referred to as “Jinhui”) has applied to this Court for a retrial against the respondent, Taizhou Environmental Protection Federation (TEPF) due to dissatisfaction with the Su Huan Gong Min Zhong Zi No.00001 (2014) by Jiangsu High People’s Court concerning the pollution tort dispute between TEPF and Jinhui together with defendants in first instance and appellants in second instance Jiangsu Changlong Agrochemical Co., Ltd. (hereinafter referred to as “Changlong”), Jiangsu Shimeikang Pharmaceutical Company (hereinafter referred to as “Shimeikang") and Taixing Shenlong Chemical Co., Ltd., defendants in first instance Taixing Fu’an Chemical Co., Ltd. and Taixing Zhenqing Chemical Co., Ltd. In accordance with relevant laws, this court established a colligate panel to review the case. The review has now been completed. In the retrial application, Jinhui claimed that: 1. The court of the second instance erred in the determination of the amount of acid by-products dumped by Jinhui through Taizhou Jiangzhong Co., Ltd. (hereinafter referred to as “Jiangzhong“). 1) According to the statement by DAI Weiguo etc., 653.08 tons of acid by-products produced by Jinhui was dumped by Jiangzhong. 2) According to the transportation invoice issued by the Taixing branch of Xinghua Xieyu Transportation Co., Ltd. (hereinafter referred to as “Xieyu Taixing”), Jinhui provided 1702.27 tons of acid by-products to be transported. Given the court of the second instance deemed the transportation cost as equal to the cost of compensating for dumping, the amount of acid by-products involved should be determined based on the amount shown on the transportation invoice. 3) According to the records of sales invoice, DAI Weiguo etc. started dumping acid by-products sold from Jinhui to Jiangzhong since August 2012. Prior to that, Jinhui had invoiced to Jiangzhong 3822.2 tons of acid by-products. The 455.42 tons of acid by-products invoiced on December 29th 2011 was recorded in 2012, rather than dumped in 2012. These two figures (i.e. 3822.2 tons and 455.42 tons) should not be counted in the total amount of acid by-products sold by Jinhui to Jiangzhong, and therefore the correct amount should be either 653.08 tons or 1702.27 tons. 2. There is no factual grounding for the judgement in the second instance to rule that Jinhui should pay for environmental restoration costs. 1) The rivers involved in the case do not need to be restored and compensated. Before the pollution took place, the water quality of Rutai Canal and Gumagan River was classified as Class III. By 2013, the rivers had purified themselves and the water quality remained Class III. TEPF did not submit any evidence arguing that the pollution had caused any losses to any persons or properties, so Jinhui should not be liable for environmental restoration costs or compensating for any losses. 2) The judgement of the second instance did not confirm or assess the actual ecological damage to the rivers involved in the case. There is no factual or legal grounding for calculating ecological damage of these rivers based on water pollution remediation costs. 3) The method used in determining and calculating restoration costs was wrong. Recommended Methods of Assessing Environmental Pollution Damages (1st Edition) (hereinafter referred to as "Recommended Methods”) issued by Chinese Academy for Environmental Planning of Ministry of Environmental Protection recommended three methods for assessing environmental damage costs -- the “actual remediation expenses” method, the “virtual management costs” method and the “virtual remediation costs” method. The Technical Report of Environmental Damage Assessment for Waste Acid Dumping Incident in Taixing Gumagan River & Rutai Canal on December 19 (hereinafter referred to as Technical Assessment Report) determined the unit cost for water quality restoration with reference to the “virtual remediation costs” method prescribed by Article 4.5.2 of Recommended Methods 1st Edition. The report used chemical oxidation method for water quality restoration, whose unit cost, according to the Recommended Methods, stands at CNY 700 per ton. Furthermore, according to the Recommended Methods, the environmental sensitivity coefficient for the water category is 1.4-1.6. As a result, the total environmental restoration cost should be over CNY 50 million, among which CNY 8,757,855 should be the liability of Jinhui. In addition, in the first instance, TEPF argued that the six defendants shall compensate for the water pollution damage, not restoration costs. Therefore, the judgement of the second instance exceeded the plaintiff’s claim by ruling the six defendants to pay for restoration costs. 3. The judgement of the second instance erred in the application of relevant laws. 1) The first edition of Recommended Methods had expired by the time of the second instance. According to the second edition, which should have been applied to reassess damages, there are two approaches to restore natural environmental damage – environmental remediation and ecological restoration, both based on the happening of actual ecological and environmental damage. However, there are no such ecological or environmental damage involved in the present case, so remediation/restoration is unnecessary. 2) Jinhui paid due care to the sales of acid by-products. Jinhui established contracts with the buyer and agreed on the payment of transportation costs. This is in accordance with Contract Law of the People’s Republic of China but not with Tort Law. 4. TEPF does not have the standing to bring the present environmental public-interest litigation (EPIL), so the judgement of the second instance erred in deeming it as an eligible party. 5. Jinhui should not be the liable party in the present case, because Jinhui did not discharge, dump or release any pollutants, neither did it incite another party to do so. Jinhui had nothing to do with how Jiangzhong disposed of the acid by-products it had purchased. There is no connection of intention between Jinhui and Jiangzhong. Therefore, Jinhui should not be liable for polluting the environment. 6. The judgement of the second instance erred in the application of law because the judgement referred to affirmation rules as prescribed in Article 170, Paragraph 1, Subparagraph 1 of the Civil Procedure Law of the People’s Republic of China (hereinafter referred to as “CPL”), but in fact amended the judgement of the first instance. 7. The judgement of the second instance infringed upon the autonomy of Jinhui by ruling that the environmental protection authorities shall have the decision power over the execution of section four of the main text of the judgement, which should have been the autonomy of Jinhui. 8. TEPF did not file litigations against other chemical companies involved in polluting the environment. Meanwhile, the court entertained EPILs brought by Friends of Nature, Chaoyang District, Beijing against other local companies, which may affect the amount of compensation that Jinhui shall be liable for. As a result, in accordance with Article 200 Subparagraph 2, subparagraph 6 and subparagraph 11 of CPL, Jinhui submitted the retrial application. TEPF responded as follows: 1. As one of “relevant organizations” prescribed in Article 55 of CPL, TEPF is a qualified party and has the standing to file civil EPILs. 2. The “sales” of acid by-products by Jinhui was illegal disposal of waste materials, and the
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